BNP Paribas, SocGen brace for more hits from TLTRO hedge unwinds

Duo expect combined €600m in losses after already booking €500m in first quarter

BNP Paribas and Societe Generale are set to report losses of a combined €600 million ($655 million) over the coming months, as they get rid of interest rate hedges turned loss-making by tightening terms on the European Central Bank’s main funding-for-lending facility.

Like several of their peers, the two banks had hedged their drawdowns from targeted longer-term refinancing operations (TLTROs), an ECB wholesale liquidity programme that carried incentives for extending credit to smaller borrowers

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